With the help of her advisers, she came up with three plans: (1) a new, goal-driven compensation system; (2) a participative-management derivative that CCI calls "input teams"; and (3) an over-the-top training program.
For several years Andy Cunningham had managed Allison Hopkins with a choose-your-salary compensation system: Hopkins would name the amount she wanted to earn and the requirements she thought were reasonable, and she and Cunningham would negotiate until they reached an agreement. At the end of 1989 Cunningham decided to do the same with her BUDs.
They balked at the new sets of responsibilities. "I presented them with a series of goals I thought they should reach, and I gave them a chance to do so, and then they ended up leaving," says Cunningham. Over a six-month period, in fact, all six BUDs except Ricci -- the entire senior staff other than Ricci, Hopkins, and controller Leon Hunt -- departed. Cunningham maintains she was not particularly surprised -- or unhappy.
"It was hard," says Cunningham, "but they weren't right for the company." Frank Bailinson, one of those who left, and who, as director of corporate marketing for Autodesk, is now a CCI client, says the mass exodus was coincidental. People left for a series of personal reasons. And none of them, he notes, went to another PR firm. "The BUD system didn't do a good job training people to be managers."
Then in March 1990 an employee became incensed over her evaluation during an annual review. Hopkins and Cunningham holed up for the rest of the afternoon and decided to bring to the entire company the same compensation/goal-setting plan Cunningham had set up for Hopkins. They drew up job "modules" -- descriptions of the responsibilities for each of nine levels of associates, with a salary range from $21,000 to $100,000. Associates could choose the salary they wanted to make, based on the responsibilities they could handle. By July the system was in place.
Picking salaries wasn't easy for most people -- as a concept, it's not normal. For one thing, it's more active than the here's-your-raise-here's-your-job structure that's typical everywhere, let alone in California public relations. And declaring what you think you're worth engenders a kind of responsibility for fulfillment that can be daunting at first.
The system has been tinkered with since it was implemented, two years ago. The way it works today, associates choose the salaries and responsibilities they will work toward over the next year. The modules cover dozens of expectations that range from the tangible (such as how many hours a week associates are expected to bill and how large an account budget they're expected to manage) to more intangible professional-growth factors (measured by skills such as "ability to construct strategic memos to clients" and "know the media and analyst circles"). Each associate then meets with his or her adviser each month, to go over the previous month's work and present a set of goals for the coming month -- specifics, such as "develop collateral piece for product introduction" and more fuzzy plans, such as "improve presentation skills." Contrary to the concerns of just about everybody, most people do not ask for salaries that are out of line with what they'd normally make.
The payoff is in the institutionalization of feedback for the growing company. "Every month I pretty much knew I was on track," says Toni Giusti, who joined the company in the spring of 1990. At one point she didn't get the whole salary she'd been working toward. "I got most of it," she says, "and they were holding a couple thousand dollars until my writing and counseling got better. But every month your manager would tell you, 'This is the kind of thing that was great this month, and this is what you need to think about next time.' So it wasn't a surprise."
What's more, the system -- referred to internally as a Management by Objective plan, or MBO -- gives the employees better command over their careers. "Before the MBO system, we did talk about expectations, but this crystallized and regularized those discussions," says associate Lisa Goldman. "Before, goals were less clearly defined, and there wasn't a clear ladder. Now you can get to where you want to be, with more control on your part."
Mike Gullard, a venture capitalist who is Cunningham's adviser, has been a strong advocate. "I worked at Intel, and in the early days that was one of the things that was in place very, very quickly: formalized reviews, goal setting. I think it's one of the reasons Intel was capable of growing as it did without any of the wheels falling off."
Executing MBO programs halfheartedly can be worse than never setting goals at all -- because the message then is that an employee may have ambitions, but management doesn't really care if he or she meets them. But feedback is crucial in rapidly changing companies, Gullard says, precisely because priorities do change. "The last thing you want to find out is that you've been working on something for three weeks that is no longer relevant." The system guarantees cost-effectiveness, too. Associates get the higher pay only when they're bringing in and overseeing more work.
As an adjunct to the compensation program, Cunningham has increased the stakes for CCI's major players. This year she introduced a Partner Program, making Hopkins, Hunt, Ricci, and FitzGerald partners in name and in stock options. It's her way to recognize -- and by recognizing, keep -- people who've been essential to the fiber of the company. "If I died tomorrow, these are the people who'd run the company the way I did," says Cunningham. "They've let their egos out the door: they're people whose definition of success is when other people succeed."
